What’s not to like about low levies?

There are many similarities between Federal and state politics and strata committees, including that if you promise people lower taxes, they will happily forget about all the services they want.

It’s also the easiest way for an executive committee get re-elected: “Look, our levies haven’t gone up for five years.  Three cheers for us!”

Except, levies (or fees) really should go up. Apart from the sorting-out period for new buildings when all sorts of adjustments have to be factored in, things should generally cost more.  It happens everywhere else in life, why should apartment blocks be immune?

However, if the Grey Ghosts – a combination of absentee landlords and fixed income retirees – take over your building, they will put a choke on your levies that would bring tears to Joe Hockey’s eyes.

You can see the attraction.  If you’re trying to make money from a rental apartment, levies are a cost and you want them as low as possible.

If you are on a fixed income, prices may be going up but your cash reserves aren’t. And any argument about lowering the value of the property doesn’t cut it with people who have no intention of selling any time soon.

Thus, every year energy bills, wages and service charges rise but the levies remain the same.  The committee gets re-elected because of their fiscal rectitude and everybody’s happy.

Except … where are these savings coming from?

Does the cheaper cleaning firm clean as thoroughly as the guys they replaced? Is maintenance done on a ‘wait till it breaks’ basis (see Rental Rant)? Does the money in the sinking fund no longer match the probable future needs of the building?

Slowly but surely, carpets get worn and not replaced, common areas start looking grubby, facilities break down, gym equipment gets so old it should carry a health warning and light globes go unreplaced.

You should be OK as long as there’s a chronic shortage of rental properties. But you’ll look pretty shabby when all these shiny new apartment blocks come on stream.

There’s more on this in the Forum.

Meanwhile, this was the last Flat Chat column that will also appear in print.  There is a major revamp of Domain underway and, like many other popular items, Flat Chat is moving to online only.  After 518 columns and nearly 11 years, it’s time for a change and I can actually say more and get better feedback on the net.  You can follow me on Domain online and catch up with previopus colums and news articles that you have missed.  Or you can just come back here …

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